Symmetry of Spot Market Rise and Fall since the Pandemic

Cass Information Systems is fresh out with its freight report for July, and results again are mixed.

Surpply Chain Digest Says...   Truckload rates are up about 67% since Jan. 2010, or about an average of 4.3% per year. What do you say? Click here to send us your comments Click here to see reader feedback

The monthly report from Cass and partner Tim Denoyer of ACT Research, is based on data from the billions of dollars of freight bills that Cass pays for its shipper clients.

The Cass Shipments Index, which includes multiple modes but is weighted towards full truckload freight, was basically flat in July, up 0.4% in the month versus July 2021. Month-over-month it was up 0.6% versus June.

Denoyer commented on the results that "Freight demand has flattened out this year with inflation near 9% and significant substitution from goods back to services. Considering the extraordinary goods consumption during the pandemic, a reversal as services have reopened shouldn’t be much of a surprise."

The July, expenditures component of the Cass Freight Index, which measures the total amount spent on freight, was up 28% versus 2021. However, expenditures fell 2.4% month-over-month in July, with shipments up 0.6% and rates down 2.9%.

Denoyer says much of the expenditure increase was due fuel prices alone. This index includes changes in fuel, modal mix, intramodal mix, and accessorial charges, as well as rates, in its calculation.

Denoyer sees shipment volumes continuing to fall modestly for the rest of the year, with predictions for a slight year-over-year decline in Q3, followed by 4%-5% decrease in Q4.

"With the tight supply/demand balance in U.S. trucking markets easing considerably this year, industry rates are topping out and set to slow sharply in the months to come," Denoyer says.

He has it both ways on diesel prices though, saying that "diesel prices could fall further, but could also easily revert higher if the situation in Europe worsens."

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Another look at rates comes from the Cass Linehaul Index, which measures US per mile contract truckload rates before fuel surcharge and other accessorials.

In July, that index was up 10.5% year-over-year to 162.7. The index baseline is January 2010, set at an index level of 100. That means truckload rates are up about 67% since then, or about an average of 4.3% per year.

Each month, Cass nicely summarizes the state of freight, as seen in the graphic below for July:

Source: Cass Information Systems

Summing the market situation up, Denoyer observes that "One of the most interesting observations about truckload spot rates this year is the symmetry of the decline of about 75-80 cents per mile, excluding fuel, which is exactly the amount they jumped after the initial market tightening in 2H of 2020."

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